Lancaster Municipal Code Ch. 5.56 Commercial Cannabis Activity

Footnotes:

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Editor's note— Ord. No. 1083, § 1(Exh. A), adopted May 11, 2021, repealed the former Ch. 5.56, §§ 5.56.010—5.56.180, and enacted a new Ch. 5.56 as set out herein. The former Ch. 5.56 pertained to similar subject matter and derived from Ord. No. 1053, § 1, adopted Dec. 11, 2018.

Commercial cannabis activity shall be permitted as set forth in this chapter and chapter 17.43 of the Code. Licensure and location approval shall be required pursuant to and in accordance with this chapter, chapter 17.43 of the Code, and any and all regulations promulgated by the city manager to implement the provisions of this chapter and/or chapter 17.43. The purpose of this chapter is to align the city's regulation of commercial cannabis activity with applicable state law and to regulate the types of commercial cannabis activity permitted under state law. This chapter is enacted specifically in response to the state laws that permit commercial cannabis activity and the objective of this chapter is to minimize its negative impacts.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

A. The following terms shall be defined as follows:

"Adult-use" or "adult-use cannabis" means cannabis or cannabis product that is used or intended to be used by adults who are over twenty-one (21) years of age and who do not possess a physician's recommendation for medicinal cannabis.

"Applicant" means a person applying for a city commercial cannabis license.

"Cannabis" means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salts, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtain from cannabis. For the purpose of this chapter, "cannabis" does not mean industrial hemp as that term is defined by Section 81000 of the California Food and Agricultural Code or Section 11018.5 of the California Health and Safety Code.

"Cannabis concentrate" means cannabis that has undergone a process to concentrate one or more active cannabinoids, thereby increasing the product's potency. Resin from granular trichomes from a cannabis plant is a concentrate for purposes of this chapter.

"Cannabis cultivation facility" means a facility wherein cannabis is propagated, planted, grown, harvested, dried, processed, stored, cured, graded, labeled, tagged for tracking or trimmed, or that does all or any combination of those activities. For purposes of this chapter, "cultivation facility" also means and includes stand-alone nurseries and processing facilities.

"Cannabis distribution facility" means any facility or location where the primary purpose is the procurement, sale, and transport of cannabis and cannabis products between licensed entities.

"Cannabis facility" means collectively any cannabis cultivation, manufacturing, distribution, or retail facility, as those terms are defined in this chapter. A "cannabis facility" may be comprised of: all structures located on a parcel operated by a single licensee; one or more buildings operated by a licensee on a parcel that contains other building(s) which are operated by other licensees; or a suite or unit within a building operated by a licensee that contains other suites or units operated by other licensees. For purposes of this chapter, "cannabis facility" and "facility" may be used interchangeably.

"Cannabis manufacturing facility" means a facility where the production of cannabis concentrate, or preparation, propagation, compounding and/or packaging of manufactured cannabis is conducted, either directly or indirectly or by extraction methods, independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis.

"Cannabis product" means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.

"Cannabis retail facility" means a building, or a suite or unit within a building, in which a licensed cannabis retailer or licensed microbusiness authorized to engage in retail sales displays, offers and/or sells cannabis, cannabis products, or devices for the use of cannabis or cannabis products, either individually or in any combination, for retail sale.

"Canopy" means the total combined indoor area for all locations on a property where cannabis is being cultivated, as measured by the horizontal extent of the plant or combination of plants at the widest point and measured in a straight line. This does not include aisles or walkways.

"Cultivation" means any activity involving the propagation, planting, growing, harvesting, drying, curing, processing, storing, packaging, labeling, grading, or trimming of cannabis.

"Delivery" means the commercial transfer of cannabis or cannabis products from a licensed retailer or licensed microbusiness authorized to engage in retail sales to a purchaser. "Delivery" also includes the use by a cannabis facility of any technology platform owned and controlled by the cannabis facility, that enables purchasers to arrange for or facilitate the commercial transfer by a licensed retailer of cannabis or cannabis products.

"Delivery employee" means an individual employed by a licensed retailer or licensed microbusiness authorized to engage in retail sales who delivers cannabis goods from the licensed retailer or licensed microbusiness premises to a customer at a physical address.

"Distribution" means the procurement, sale, and transport of cannabis and cannabis products between licensed cannabis business entities.

"Edible cannabis product" means manufactured cannabis that is intended to be used, in whole or in part, for human consumption, including, but not limited to, chewing gum, but excluding products set forth in Division 15 (commencing with Section 32501) of the Food and Agricultural Code. An edible cannabis product is not considered food as defined by Section 109935 of the Health and Safety Code or a drug as defined by Section 109925 of the Health and Safety Code.

"Good cause" for purposes of denying, revoking, suspending, or refusing to renew or reinstate a license includes, but is not limited to, the following:

1. The licensee or applicant has violated any of the terms, conditions or provisions of this chapter, of state law, of any regulations and/or rules promulgated pursuant to state law, any applicable local rules and/or regulations, or any special terms or conditions placed upon its conditional use permit, state license, and/or city license;

2. The licensed premises have been operated in a manner that adversely affects the public health, safety or welfare or the safety of the immediate neighborhood in which the establishment is located, causes adverse economic impacts, increased crime, increased incidence of communicable disease, increased demand on public safety resources and law enforcement personnel, decreased property values and/or an increase in the number of transients in the area;

3. The licensee or applicant has knowingly made false statements, misrepresentations or material omissions on an application form, renewal form, or any other document submitted to the city;

4. Issuance of the license would impair the health, safety or welfare of the public, cause negative impacts to property values, impair the city's ability to prevent crime associated with cannabis, and/or impair the city's ability to ensure that cannabis grown remains secure and does not find its way to minors or illicit markets.

5. The applicant or licensee's criminal history does not indicate that the applicant or licensee is of good moral character; or the applicant or licensee has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, or that otherwise indicates that his or her operation of a cannabis facility would pose a hazard to public health and safety;;

6. The licensee or applicant is employing or being financed in whole or in part by any person whose criminal history indicates that person is not of good moral character or that otherwise indicates his/her financial interest in a cannabis facility will pose a hazard to public health and safety;

7. The applicant or licensee has failed or refused to allow city officials to inspect security recordings, activity logs, or business records, of the licensed premises;

8. The licensee has failed to adequately reconcile its inventory, such that shortages in its cannabis and/or cannabis product cannot be accounted for in the paper and/or electronic inventory tracking system(s);

9. The applicant or licensee has failed to pay any and all cannabis fees, surcharges, and/or fully adjudicated administrative citations;

10. The applicant or licensee has had a license revoked or has had more than one suspension of its license by the city, county, and/or state; or

11. The applicant or licensee operated a cannabis business in violation of this chapter, chapter 17.43, or any other applicable state or local law or regulation.

"Indoor cultivation" means the cultivation of cannabis within a permanent structure using exclusively artificial light or within any type of structure using artificial light at a rate above twenty-five watts per square foot.

"Legal parcel" means a parcel of land for which one legal title exists. Where contiguous legal parcels are under common ownership or control, such legal parcels may at the option of the property owner be counted as a single parcel for purposes of this chapter.

"Licensee" means a person who has been issued a city license to conduct commercial cannabis activity on premises for which a conditional use permit has been approved.

"Manufacturer" means a person that conducts the production, preparation, propagation, or compounding of manufactured cannabis or cannabis products either directly or indirectly or by extraction methods, or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis at a fixed location that packages or repackages cannabis or cannabis products or labels or relabels its container.

"Medicinal cannabis" or "medicinal cannabis product" means cannabis or a cannabis product, respectively, intended to be sold for use pursuant to the Compassionate Use Act of 1996 (Section 11362.5 of the Health and Safety Code) by a medicinal cannabis patient in California who possesses a physician's recommendation. For purposes of this chapter, "medicinal" and "medical" may be used interchangeably.

"Mixed-light cultivation" means the cultivation of mature cannabis in a greenhouse, hoophouse, glasshouse, conservatory, hothouse, or other similar structure using a combination of: (1) Natural light and light deprivation and one of the artificial lighting models listed below: (a) "Mixed-light Tier 1" without the use of artificial light or the use of artificial light at a rate above zero, but no more than six watts per square foot; (b) "Mixed-light Tier 2" the use of artificial light at a rate above six and below or equal to twenty-five watts per square foot; or (2) Natural light and one of the artificial lighting models listed below: (a) "Mixed-light Tier 1" the use of artificial light at a rate above zero, but no more than six watts per square foot; (b) "Mixed-light Tier 2" the use of artificial light at a rate above six and below or equal to twenty-five watts per square foot.

"Nursery" means all activities associated with producing clones, immature plants, seeds, and other agricultural products used specifically for the propagation and cultivation of cannabis.

"Outdoor cultivation" means the cultivation of mature cannabis without the use of artificial lighting or light deprivation in the canopy area at any point in time. Artificial lighting is permissible only to maintain immature plants outside the canopy area.

"Person," as used in this chapter, means and includes any individual, partnership or any kind, corporation, limited liability company, association, joint venture or other organization or entity, however formed.

"Process" or "Processing" mean all activities associated with the drying, curing, grading, trimming, rolling, storing, packaging, and labeling of cannabis or nonmanufactured cannabis products.

"Responsible person" means any person, whether as a licensee, property owner, lessee, employee, agent, or otherwise, that allows, causes, creates, maintains, or permits any violation of this chapter, chapter 17.43, or applicable state or local cannabis law or regulation, to exist or continue, by any act or the omission of any act or duty. The actions or inactions of a responsible person's employee, agent, representative or contractor may be attributed to that responsible person.

"State law(s)" shall mean and include California Health and Safety Code Section 11362.5 (Compassionate Use Act of 1996); California Health and Safety Code Sections 11362.7 through 11362.83 (Medical Cannabis Program Act); California Business and Professions Code Sections 26000 through 26231.2 (Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA")), and all other applicable laws of the state of California.

"State license," "license," or "registration" means a state license issued pursuant to MAUCRSA.

"State licensing authority" shall mean the Bureau of Cannabis Control within the California Department of Consumer Affairs, the California Department of Public Health, the California Department of Food and Agriculture, or any other state agency responsible for the issuance, renewal, or reinstatement of a license issued under MAUCRSA or the agency authorized to take disciplinary action against such license.

"Testing laboratory" has the same meaning as that term is defined by Section 26001(as) of the Business and Professions Code and shall mean a laboratory, facility or entity that offers or performs tests of cannabis or cannabis products and that is both of the following:

1. Accredited by an accrediting body that is independent from all other persons involved in commercial cannabis activity in the state;

2. Licensed by the bureau of cannabis control.

B. Words and phrases not specifically defined in this Code shall have the meaning ascribed to them as defined in the following sources:

1. The Compassionate Use Act of 1996 (California Health and Safety Code Section 11362.5);

2. The Medical Cannabis Program Act (California Health and Safety Code Sections 11362.7 through 11362.83); and

3. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (California Business and Professions Code Sections 26000 through 26231.2) as may be amended from time to time.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

A. Subject to this chapter, chapter 17.43 and all other applicable state and local laws and regulations, a person may conduct the following types of commercial cannabis activities within the city:

1. Cultivation, including indoor cultivation, mixed-light cultivation, and stand-alone nurseries and processing facilities;

2. Manufacturing;

3. Distribution;

4. Retail sales;

5. Delivery, when originating from a retail facility within the city at a location for which a conditional use permit has been approved and whose owner possesses current and valid local and state licenses and permits;

6. Testing laboratories, accredited and licensed as required pursuant to MAUCRSA.

B. The maximum number of licenses issued by the city may be limited by written policy prepared and implemented by the city manager, said policy to be distributed to the City Council within ten (10) business days of its promulgation or amendment.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

It shall be unlawful to engage in commercial cannabis activity in the city except as provided in section 5.56.030 of this chapter.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

It is unlawful for a person to operate a cannabis facility without first having obtained a city cannabis license and paying all requisite fees and surcharges. It is unlawful for a person to operate a cannabis testing laboratory without having first obtained a general business license pursuant to chapter 5.04 of the Code. A person must have a current and valid license at all times such person is conducting business.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

A. A cultivation, manufacturing, distribution and/or retail facility licensee shall only operate at a location for which a conditional use permit has been approved for use as a cannabis facility, in accordance with the procedures set forth in chapter 17.43.

B. Prior to commencing cannabis facility or testing laboratory operations, a person shall obtain all approvals, permits and licenses required by other local agencies, including without limitation, the Los Angeles County Department of Public Health, Los Angeles County Fire Department, and Antelope Valley Air Quality Management District.

C. Prior to commencing cannabis facility operations, a person shall obtain all requisite state licenses, permits and approvals, and must maintain current and valid requisite state and local licenses and permits at all times such person is operating a cannabis facility.

D. A testing laboratory must first obtain accreditation and state licensure as required pursuant to MAUCRSA prior to applying for, and being issued, a city business license, and must hold current and valid accreditation and state licensure at all times the laboratory is conducting business.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

A. Requirements for cannabis facility license applicants. The applicant shall file an application with the city manager or designee upon a form provided by the city and shall pay an application fee as established by resolution adopted by the city council as amended from time to time. The application shall include a statement by the applicant that he or she certifies under penalty of perjury that all of the information contained in the application is true and correct. The city shall not receive or act upon an application for the issuance of a license pursuant to this chapter until a completed application and the fee established by resolution of the city council is submitted to the city. An applicant shall have an opportunity to cure any incomplete application within ten (10) days of written notice of incompleteness by the city. An application for a license shall include the information and documents required by the applicable state licensing agency and shall include at least the following:

1. Proof of organizational status, such as articles of incorporation, taxpayer or employer identification number, by-laws, organizational minutes, partnership agreements, and other documentation as may be required by the city.

2. Proof of having paid for and obtained an electronic fingerprint scan, known as Live Scan; which will be used to conduct a criminal background investigation. Live Scan documentation shall be required of the applicant, any management personnel responsible for the day-to-day operations and activities of the cannabis facility, and any shareholder, partner, member, officer, director and/or any person having a five percent (5%) or greater financial interest in the proposed facility.

3. Documentation establishing that the applicant is, or will be, entitled to possession of the premises or portion of the premises for which application is made. Evidence of lawful possession consists of a properly recorded deed, lease agreement, or other written document acceptable to the city. The licensed premises shall only be the geographical area that is specifically and accurately described in executed documents verifying lawful possession.

4. An operating plan for the proposed cannabis facility including the following information:

a. A description of the types of cannabis activity to be conducted by the facility;

b. If applicable, a detailed description of the type of cultivation processes to be utilized, including, without limitation, all nutrients, chemicals and other materials;

c. If applicable, a specific description of the types of manufacturing products, activities, extraction and/or infusion methods to be conducted, specific equipment to be utilized, whether and which volatile solvents will be used, and what percentage of the facility will be used for such activity;

d. If applicable, a detailed description of the retail facility's planned operations, the cannabis and cannabis products to be sold, whether deliveries will be conducted from the retail facility;

e. A floor plan designating all interior dimensions and the layout of the facility, including all limited access areas, areas of ingress and egress, and all security camera locations. Such floor plan shall also show the principal uses of the floor area depicted therein, shall identify all areas where plants will be located and show total canopy space;

f. Name of third-party tracking software the facility will use to track the cannabis or cannabis products;

5. A security plan for the proposed facility, suite or unit including, at a minimum, the following security requirements:

a. Video surveillance. The facility must be equipped with a video surveillance system that meets all of the requirements set forth in this subsection.

i. Security cameras and digital storage of recordings shall be maintained in good condition and used in an on-going manner, twenty-four (24) hours per day, seven (7) days per week.

ii. The security system must maintain at least one hundred twenty (120) concurrent hours of digitally recorded video for each security camera in the licensed premises. Security footage should be stored in an MPEG4, MJPEG, H.264, or another format approved by the city in writing.

iii. Security cameras must provide adequate and sufficient coverage for the facility, which must include but need not to be limited to, all restricted and limited access areas, all areas of ingress and egress, the public areas, storage areas, and any other areas as required by this chapter and the MAUCRSA. iv. The video surveillance system must be equipped with a failure notification system that provides prompt notification to a security company licensed by the department of consumer affairs, bureau of security and investigative services, of any surveillance interruption or complete failure of the surveillance system that lasts longer than fifteen (15) minutes. The licensed alarm company must promptly report any such notification to the city's public safety department.

v. The video surveillance system shall have sufficient battery backup to support a minimum of four (4) hours of recording in the event of a power outage.

vi. The video surveillance system shall stream a live feed accessible to the city and Los Angeles County Sheriff's Department via a secure Internet portal, virtual private network or other form of secure remote access.

b. Alarm system. The facility shall have an audible interior and exterior security alarm system installed on all perimeter entry points and perimeter windows, operated, and monitored by a security company licensed by the department of consumer affairs, bureau of security and investigative services, and approved by the city. "Perimeter entry points" include, regardless of size, all doors, windows, hatches and/or points at which systems (such as HVAC systems) enter a structure.

c. Signage requirement. The facility must comply with the following signage requirements.

i. A sign shall be posted in a conspicuous place near each point of public access which shall be not less than twelve (12) inches wide and twelve (12) inches long, composed of letters not less than one inch in height, stating "All Activities Monitored by Video Camera." ii. Limited access areas shall be clearly identified by the posting of a sign which shall be not less than twelve (12) inches wide and twelve (12) inches long, composed of letters not less than a half inch in height, which shall state, "Limited Access Area—Authorized Personnel Only."

d. Lighting. The facility's entrance(s) and all window areas shall be illuminated during evening hours. The applicant shall comply with the city's lighting standards regarding fixture type, wattage, illumination levels, shielding, and other restrictions, and secure the necessary approvals and permits as needed.

e. Commercial-grade locks. All points of ingress and egress to a facility shall ensure the use of commercial-grade, nonresidential door locks and/or window locks.

f. Onsite security staff twenty-four (24) hours a day, seven days a week.

6. Written authorization for the city to seek verification of the information contained within the application and to conduct the background check(s).

7. Any additional information that the city may request to process and fully investigate the application. The additional information must be provided to the city no later than ten (10) days after the date of the request unless otherwise specified by the city. Failure to provide such additional information by the requested deadline may result in denial or administrative withdrawal of the application.

B. Additional requirements for cannabis retail facility license applicants.

1. In addition to the submittal requirements set forth in subsection A of this section, an applicant for a cannabis retail facility license shall also provide a completed cannabis employee application for each person who will be working at the retail facility and/or conducting deliveries; proof of having paid for and obtained an electronic fingerprint scan, known as Live Scan, which will be used to conduct a criminal background investigation for each potential employee; make, model and license plate of each vehicle to be used for deliveries within the City; and proof of automobile insurance for each potential employee who will be conducting deliveries.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

A. The city manager or designee shall reject an application for a license upon a finding of good cause, as defined in section 5.56.020.

B. The city manager or designee may place conditions upon the approval of any license which are, in the opinion of the city manager or designee, reasonably related to the protection of the health, safety and welfare of the neighborhood in which the proposed cannabis facility is to be located, and/or the general public.

C. All persons who are engaged in or who are attempting to engage in cannabis activity in any form shall do so only in strict compliance with the terms, conditions, limitations and restrictions of this chapter, chapter 17.43, and all other applicable state and local laws and regulations.

D. The City manager or designee is authorized to make policies and procedures consistent with this chapter concerning the applications, the application process, the information required of applicants, the application procedures, and the administration and procedures to be used and followed in the application process.

E. A license issued by the city constitutes a revocable privilege. The applicant has the burden of proving its qualifications for a license at all times.

F. The city manager or designee may summarily suspend, revoke or refuse to renew a license if any of the following occur:

1. The city manager or designee makes a finding of good cause concerning the licensee, as defined in section 5.56.020;

2. The city manager or designee determines that the licensee has failed to comply with this chapter, chapter 17.43 of this Code or any condition of approval, or a circumstance or situation has been created that would have permitted the city manager or designee to deny the primary license;

3. Operations cease for more than ninety (90) calendar days;

4. Ownership is changed without securing a new license;

5. The facility fails to maintain one hundred twenty (120) concurrent hours of security recordings;

6. The licensee fails or refuses to allow inspection of the premises, security recordings, books, records or other documents by authorized city officials; and/or

7. The licensee fails to possess and/or maintain all current and valid requisite state and local licenses, permits and approvals.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

In addition to any requirements in this chapter, a modification of a cannabis facility, change of manager or person(s) with financial interest, or other material change of the facility shall comply with the following:

A. A licensee shall not make physical change, alteration, or modification of the cannabis facility that materially or substantially alters the cannabis facility from the plans approved by the city without paying the fee established by resolution of the city council and obtaining the prior written approval of the city. Material changes include, but are not limited to: a decrease in the number of security cameras, the relocation of a security camera identified in the application submitted pursuant to section 5.56.070, an increase in the total square footage of the cannabis facility, or the addition, sealing off, or relocation of a wall, common entryway, doorway, or other means of public ingress and/or egress. Applications for modifications of a cannabis facility shall be made on forms prescribed by the city. The city may deny a requested modification if, in its sole discretion, it determines that such modification poses or has the likelihood of posing a hazard to public health, safety or welfare, or will otherwise be detrimental to the neighboring community.

B. In the event of a proposed change of management, addition of person(s) with five percent (5%) or greater financial interest in the facility, or change of on-site manager, report the change to the city manager or designee on forms prescribed by the city, pay the fee established by resolution of the city council and provide proof of having obtained Live Scan, and receive written approval from the city manager or designee prior to any such change.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

A. A cannabis facility licensee shall apply for the renewal of a license no less than sixty (60) days prior to the license's expiration date. The city may elect to administratively extend a license past its expiration date, provided that the licensee has tendered all requisite fees and has submitted a renewal application that is complete but pending final action by the city.

B. An application for renewal will only be accepted if it is accompanied by the requisite fees.

C. Each application for renewal shall include updated information for any part of the application that has undergone a change in circumstance since the original application, last renewal filing, or modification, and shall recertify all information submitted in prior application(s).

D. Unless the city has expressly authorized in writing the renewal of the license, a license is immediately invalid upon expiration and the cannabis cultivation facility shall cease operations until such time as a current and valid license is issued.

E. All licenses are valid for one year, provided however, that a license may be valid for less than the applicable license term if revoked, suspended, voluntarily surrendered, or otherwise disciplined.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

To the fullest extent permitted by law, the city shall not assume any liability whatsoever, with respect to approving any license pursuant to this chapter or the operation of any cannabis facility approved pursuant to this chapter. As a condition of approval of a license as provided in this chapter, the applicant shall:

A. Execute an agreement indemnifying the city from any claims, damages, liabilities or other obligations of any kind whatsoever, associated with the operation of the cannabis facility;

B. Agree to defend, at its sole expense and with counsel of the city's choice, any action against the city, its agents, officers, and/or employees related to the approval of a primary license; and

C. Agree to reimburse the city for any court costs and attorney fees that the city may be required to pay as a result of any legal challenge related to the city's approval of a primary license.

D. Deposit with the city and maintain security of at least twenty thousand dollars ($20,000.00) that may be used by the city as, when and to the extent necessary to satisfy the applicant's obligations under this section. The security shall be in the form of cash or any other form approved by the city in its sole and absolute discretion.

E. Expressly acknowledge in writing that (i) the city incurs no liability whatsoever as a result of the city's issuance of a license pursuant to this chapter, a conditional use permit pursuant to chapter 17.43 and/or approval of the security plan required by this chapter, (ii) the applicant is aware engaging in commercial cannabis activity may violate federal law, including, without limitation, the Controlled Substances Act, 21 U.S.C. § 801 et seq., and the applicant assumes all liability for such violation.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

Based on the information set forth in the application, the city manager or designee may impose reasonable terms and conditions on the proposed operations of a cannabis facility in addition to those specified in this chapter.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

A licensee must operate the licensee's cannabis facility in full compliance with the requirements set forth in this chapter at all times. Failure to comply with any of these requirements shall be considered grounds for suspension and/or revocation of a license.

A. General obligation to operate in compliance. A licensee shall comply fully with all of requirements and prohibitions set forth in applicable state and local laws and regulations, as well as the operating plan and security plan submitted pursuant to section 5.56.070.

B. General obligation to pay taxes, fees and surcharges. A licensee shall pay any applicable sales tax pursuant to federal, state, and local law, and shall pay annual license renewal fees, cannabis activity surcharges and all other legally required fees adopted by City Council and as may be amended from time to time.

C. General obligation for compliant facilities. A licensee's facility, as well as all operations as conducted therein, shall fully comply with all applicable rules, regulations, laws, and license/permit conditions.

D. Inspection of records. A licensee shall make its books, records and all other documents related to its operation available for inspection by any city officer, city official and/or law enforcement officer for purposes of determining compliance with the requirements of this chapter.

E. Secure storage of product. Cannabis or cannabis product possessed by a licensee shall be kept and stored in a secured manner within a limited access area or restricted access area at all times in compliance with the security plan approved pursuant to section 5.56.070.

F. Prohibition on cannabis consumption on premises. On-site smoking, ingestion, or consumption of cannabis shall be prohibited on the premises of all cannabis cultivation facilities. The term "premises" as used in this subsection includes the actual building, as well as any accessory structures, common areas and parking areas.

G. Prohibition on alcohol sales, distribution, or consumption on licensed premises. A licensee shall not sell, provide, store, or distribute any product that would require that the seller possess a license issued by the California Department of Alcoholic Beverage Control.

H. Display of licenses. A licensee shall display a copy of its city, county and state licenses in a conspicuous place at the entrance to the licensed premises.

I. No subletting. A licensee shall not sublet any portion of a facility or the premises on which it is located for any purpose without prior written authorization from the city.

J. On-site manager. A licensee must provide the city manager or his/her designee with the name, phone number, and email address of an on-site person who manages the operation of the facility, and who can knowledgeably answer questions or otherwise provide information and documentation to city officers conducting on-site inspections.

K. Seed to sale tracking required. A licensee must utilize third-party software that tracks all sales, transfers, purchases, receipts, deliveries of cannabis and cannabis products. The software must be capable of producing electronic shipping manifests, tracking all cannabis inventory in possession of the facility, promptly identifying a discrepancy in the stock, and tracking cannabis back to its source in the event of a serious adverse event.

L. Unique identifiers. A cannabis facility must comply with the unique identification program required pursuant to MAUCRSA; provided, however, that any unique identification program shall, pursuant to Section 11362.777(f)(2) of the Health and Safety Code, adhere to the requirements set by the California Department of Food and Agriculture and be the equivalent to those administered by the California Department of Food and Agriculture.

M. Employees.

1. A licensee shall not employ or allow to work at the facility any person who has been convicted of one or more of the following crimes within the preceding ten (10) years:

a. Possession of a controlled substance for sale pursuant to Health and Safety Code Section 11351;

b. Sale of a controlled substance pursuant to Health and Safety Code Section 11352;

c. Any violent crime, as defined by Penal Code Section 667.5;

d. Any crime considered a "strike" pursuant to Penal Code Section 1192.7(c);

2. In the event a current employee has been charged with any of the offenses set forth in subsection 1, the licensee shall prohibit said employee from entering the facility and/or engaging in facility operations until adjudication of the charges.

3. Each employee shall wear identification badges that comport with state requirements at all times he/she is on the facility premises or conducting deliveries.

4. Each employee shall have in his/or possession current and valid government-issued identification at all times he/she is on the facility premises or conducting deliveries.

5. A licensee must ensure each employee undergoes all training required by state agencies, and must retain all training records in accordance with state laws and regulations.

6. A licensee shall maintain a list of all employees on the premises and make such list available to city officers conducting inspections upon request.

7. A licensee shall establish all operational and written procedures regarding employees as required by applicable state laws and regulations.

8. The actions or inactions of a licensee's employees may be attributed to that licensee.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

Recordings made by security cameras, books, records and all other documents related to a cannabis cultivation facility's operation shall be made immediately available to the city manager or designee upon request; no inspection warrant, search warrant or subpoena shall be needed to view the materials.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

A. Any decision regarding the denial, suspension or revocation of or refusal to renew a license may be appealed by filing a written appeal on a city-approved form, and paying the applicable fee, with the city clerk within ten (10) calendar days from the date of the decision. The basis for the appeal must be specified in detail on the appeal form. If a timely appeal is filed, the effect of the decision shall be stayed pending the outcome of the appeal, unless the city manager specifically finds that the public health and safety is endangered, in which case the decision shall take effect immediately.

B. Failure of the city manager to receive a timely appeal constitutes a waiver of the right to contest a decision; in this event, the decision is final and binding.

C. As soon as practicable after a timely appeal is filed, the city manager shall fix a date, time and place for a hearing. The hearing shall be conducted by an independent and impartial hearing officer. Written notice of the time and place for the hearing shall be served by first class mail, at the return address indicated on the appeal form, at least ten (10) calendar days prior to the date of the hearing.

D. An appellant may request, in writing, that the city manager reschedule the hearing if the request is made at least twenty-four (24) hours prior to the hearing. The city manager shall grant one continuance of the hearing date.

E. Failure of an appellant to appear at the scheduled hearing shall constitute the appellant's waiver of the right to appeal. In this event, the decision is final and binding.

F. Appeal hearings are informal, and formal rules of evidence and discovery do not apply. The hearing officer shall accept testimony and consider any relevant evidence presented by the city manager or his or her designee concerning the grounds for the contested decision. The hearing officer shall take the testimony of the appellant, and/or his or her witnesses, and will consider any other evidence the hearing officer deems reliable, relevant and not unduly repetitious. The appellant may represent himself or herself or be represented by anyone of his or her choice, including counsel, at his or her sole expense. The appellant may bring an interpreter to the hearing at his or her sole expense.

G. The hearing officer shall make findings based on the record of the hearing, and shall prepare a written decision, based on those findings, to uphold, dismiss or modify the city manager's decision concerning the denial, suspension or revocation of the license. A copy of the written decision shall be served on the appellant by first class mail within ten (10) business days after the hearing.

H. The decision of the hearing officer shall be the final administrative decision. The superior court is the sole reviewing authority and an appeal of the hearing officer's decision is not appealable to the city council. The written decision shall contain the following statement: "Judicial review of the director's decision is subject to the time limits set forth in California Code of Civil Procedure, section 1094.6."

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

Notwithstanding any provision to the contrary set forth in this chapter, licenses issued pursuant to this chapter are not transferable.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

A. It is unlawful and shall constitute a public nuisance to engage in or conduct any commercial cannabis activity in violation of this chapter, chapter 17.43, any other applicable local or state law or regulation, or any condition of a license or permit.

B. Any violation of any of the provisions of this chapter shall constitute a misdemeanor violation and upon conviction thereof any violation shall be punishable by a fine not to exceed one thousand dollars ($1,000.00), or by imprisonment for a period of not more than one year, or by both such fine and imprisonment. Each day a violation is committed or permitted to continue shall constitute a separate offense.

C. The city may issue an administrative citation to any responsible person, as defined herein, for each violation of this chapter pursuant to the procedures set forth in chapter 9.48; provided, however, that notwithstanding the provisions of subsection 9.48.060(E), the penalty amounts of administrative citations issued for violations of this chapter shall be as follows, which may be amended from time to time by resolution of the city council:

1. For the first violation within a twelve (12) month period, the penalty shall be ten thousand dollars ($10,000.00);

2. For the second and any subsequent violation within a twelve (12) month period, the penalty shall be twenty thousand dollars ($20,000.00).

D. In lieu of or in addition to the foregoing, the city may collect any and all abatement and related administrative costs pursuant to the provisions of section 8.28.210.

E. The remedies provided herein are not to be construed as exclusive remedies, and in the event of violation, the city may pursue any proceedings or remedies otherwise provided by law. Any administrative citation issued pursuant to this chapter shall not prejudice or adversely affect any other civil, administrative or criminal action that may be brought to correct or abate any unlawful nuisance condition or use caused by a licensee, permittee or cannabis facility. A civil or criminal action may be brought concurrently with any other process regarding the same violation.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

The city manager is authorized to promulgate such regulations as may be necessary or convenient to implement this chapter.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)

If any section, subsection, paragraph, sentence, clause or phrase of this chapter is declared by a court of competent jurisdiction to be unconstitutional or otherwise invalid, such decision shall not affect the validity of the remaining portions of this chapter. The city council declares that it would have adopted this chapter, and each section, subsection, sentence, clause, phrase or portion thereof, irrespective of the fact that any one (1) or more sections, subsections, phrases, or portions be declared invalid or unconstitutional.

(Ord. No. 1083, § 1(Exh. A). 5-11-2021)